Cytotoxicity-guided fractionation of the crude methanol extract of a marine sponge, Ircinia sp., yielded tedanolide C (1), a new 18-membered macrolide. The structure was solved by interpreting NMR and MS data, and the relative stereochemistry was determined from a combination of homo- and heteronuclear coupling constants in conjunction with molecular modeling. Compound 1 exhibited potent cytotoxicity against HCT-116 cells in vitro. Cell cycle analysis showed that treatment of cells with compound 1 arrested cells in the S-phase.